Green Mountain's (GMCR) Strength Keeping Starbucks (SBUX) on Single-Serve Sidelines
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Green Mountain Coffee Roasters (NASDAQ: GMCR) has been one of the top performing stocks in recent years, as the two-part acquisition of Keurig's single-serve machines has made the company a dominate force in the rapidly-expanding U.S. coffee market.
The strength of Green Mountain has made the single-serve market difficult to penetrate for coffee titan Starbucks Corp. (NASDAQ: SBUX) to enter, the Wall Street Journal argues. The Seattle-based company shelved is single -serve coffee business earlier this month and a tie up with Green Mountain may be the only answer to cashing in, as a takeover may not be an option.
Green Mountain now has a market cap of about $6 billion, compared to $30 million in 2000, making the company to large for Starbucks to acquire without a dilutive share issue or a large debt offering.
The single-serve machine sales for Green Mountain jumped 75 percent in 2010 to $1.6 billion, giving the company a 90 percent market share. Owning both the pod and machine production will make it difficult for competitors to become viable.
As sales of single serve machines continue to boom, Starbucks may not have time to waste developing its own machines for sales.
Shares of Green Mountain are up 3.08 percent ton $42.21 in early market movement on Wednesday.
The strength of Green Mountain has made the single-serve market difficult to penetrate for coffee titan Starbucks Corp. (NASDAQ: SBUX) to enter, the Wall Street Journal argues. The Seattle-based company shelved is single -serve coffee business earlier this month and a tie up with Green Mountain may be the only answer to cashing in, as a takeover may not be an option.
Green Mountain now has a market cap of about $6 billion, compared to $30 million in 2000, making the company to large for Starbucks to acquire without a dilutive share issue or a large debt offering.
The single-serve machine sales for Green Mountain jumped 75 percent in 2010 to $1.6 billion, giving the company a 90 percent market share. Owning both the pod and machine production will make it difficult for competitors to become viable.
As sales of single serve machines continue to boom, Starbucks may not have time to waste developing its own machines for sales.
Shares of Green Mountain are up 3.08 percent ton $42.21 in early market movement on Wednesday.
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